Morning Brew

Cassandra Cassidy

People are pushing aside their old sweatpants for $150 Ultra-Soft Train Winter Knit pullovers. Lululemon and other retailers reported higher-than-expected Q4 sales yesterday, as shoppers&nbsp;<a href="https://www.cnbc.com/2025/01/13/lululemon-releases-holiday-sales-raises-earnings-and-revenue-guidance.html">spent more</a>&nbsp;on clothes, shoes, and accessories during the holiday season—but it wasn’t enough to wow growth-hungry investors.<div class="paywall-selector"></div><div class="paywall">



Cher Horowitz mindset:&nbsp;Mall darlings Lululemon,&nbsp;<a href="https://finance.yahoo.com/news/abercrombie-fitch-anf-stock-trades-175140886.html">Abercrombie</a>, and American Eagle bumped their forecasts for Q4, and <a href="https://fortune.com/company/nordstrom/" target="_blank">Nordstrom</a> raised its annual forecast after positive shopping data from the end of the year.



Credit card networks also noted a jump in clothes shopping. <a href="https://fortune.com/company/visa/" target="_blank">Visa</a> said spending on clothes and accessories increased 5% this holiday season, and for <a href="https://fortune.com/company/mastercard/" target="_blank">Mastercard</a>, online retail spending in the category surged 6.7%.



Wall Street was underwhelmed.&nbsp;Shares fell across the board for retailers yesterday, with Abercrombie down as much as 18%. Investors are concerned about where these somewhat modest sales increases came from, such as through&nbsp;<a href="https://www.retailbrew.com/stories/2025/01/09/year-ahead-in-fashion-retailers-can-prepare-for-a-stronger-2025-with-better-pricing-and-a-focus-on-experiences">discounted prices</a>&nbsp;that got shoppers to buy merchandise but may eat into profit margins.



Keep an eye out for fresh ’fits. It&#8217;s possible that everyone had the same new year’s resolution, but there’s another more likely driver behind the bursting interest in fashion: <a href="https://www.nbcnews.com/business/consumer/people-are-still-refreshing-covid-wardrobes-return-office-rcna186108">return-to-office</a> mandates. Large employers, such as <a href="https://fortune.com/company/amazon-com/" target="_blank">Amazon</a> and JPMorgan, have instituted the controversial 5-day in-office workweek that calls for a capsule wardrobe.—CC



This report was <a href="https://www.morningbrew.com/stories/2025/01/14/the-wardrobe-revamp-is-in" target="_blank" rel="noreferrer noopener">initially published</a> by <a href="https://www.morningbrew.com/" target="_blank" rel="noreferrer noopener">Morning Brew</a>.</div>

Wall Street isn't impressed by retailers' earnings, though.

Return-to-office mandates are forcing workers to revamp their wardrobes

The 50 companies most likely to thrive, 5 investing trends for 2025, and more. Read the latest edition of <a href="https://fortune.com/packages/december-2024-january-2025/?&itm_source=fortune&itm_medium=article_tout&itm_campaign=DecJanMag">the magazine.</a>

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Lifestyle

Return-to-office mandates are forcing workers to spend more money revamping their wardrobes

Return-to-office mandates are forcing workers to revamp their wardrobes | Fortune

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